Equity Partner Compensation

Paying the owners of a law firm properly is a complex process that involves objective and subjective factors. Balancing historical contributions and the current needs of an organization can conflict but not always. It is important to consider the risk and reward nature of the equity owner’s position and the benefits of a collaborative approach.

Most successful firms use a combination of objective factors that relate to client origination, personal productivity, and contributions to profit. Often these contributions are measured over a multi-year period but not always. Consideration of subjective factors varies by firm. Risk reward compensation factors also vary by firm.

We help law firms develop the right compensation plans and also seek a balance between the long term health of the firm and short term economic pressures. We can provide our services on a project basis or on a longer-term basis support the administration of the recommended systems.

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What can you accomplish with a solid compensation program and what can PerformLaw do for you?

The Process

How does a compensation services agreement work?


Where can I learn more about the topics I might want advice about?


The confidence of knowing you will receive objective feedback. Clients who engage PerformLaw to improve performance get objective, experienced, and practical advice in several important law firm management areas.

The ability to implement attorney performance improvement actions Use of our tools, templates, processes, market awareness and creative plan design expertise are included in the engagement.

A solution for the long term. Attorney performance engagements include customized policies, procedures, forms, and templates for your organization.

The comfort of knowing that your best people can thrive and prosper in your system. Attorney performance engagements include a complimentary high-level strategic plan to ensure that we help you align your new systems with your strategic goals.

What PerformLaw can do for you:

  • We help clarify goals and expectations (Strategy).
  • We consult on the best tactics to achieve the goals (Identification of tasks and association with goals) and provide tools and processes.
  • We ensure clients have the information they need to make informed decisions.
  • We offer relevant and timely advice in all the key law firm management areas.
  • We are available when clients need us before, during and after an engagement.



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Timekeeper productivity reports

Billable hours, value, realized rates, billings, collections, and rates (Past 2 years and current YTD)

Workload distribution reports

Hours worked, billed and collected by client/matter (Past 2 years and current YTD)

Origination statistics

Hours worked, billings and collections by client and by originator (Past 2 years and current YTD)

Hire dates and promotion histories/ Terminations (timekeepers)

For all timekeepers (if available)

Firm income statements and balance sheets

Please also include any supplemental Information included in your financial reporting process (Past 2 years and current YTD)

Individual budgets or expectations

Any expectations the firm has for individuals.

Payroll histories and job titles for all employees

Salaries, wages with raise and bonus histories, title and job assignments (paralegal, secretary to....)(Actual Payroll Registers will be helpful as well) (Past 2 years and current YTD)

Operating agreement

With latest amendments

K1's and W2's

  • Any firm paid benefits

Income allocation worksheets


Prepare objective compensation models

Profitability-based model

Fee share models

Related analysis

  • Client Profitability
  • Equity Adjustments
  • Income Allocations

Alternative compensation plans (if applicable

  • Fee Sharing
  • Profit Sharing
  • Hourly
  • Task-based
  • Subjective and lockstep systems

Recommended system improvements


Current compensation policies

Recommended policy changes

Compensation philosophy

Strategic alignment


Progression Levels

Service Requirements

Qualitative & Quantitative Factors

Equity Membership Admission & Progression

Lateral Hiring Considerations


Origination Sharing

Leave & Illness

Dispute resolution process


System mechanics and incentives

Benefits of collaboration



Here are some of our most helpful resources to learn more about compensation systems:

Knowledge Base